HIH case thrown out of court

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Charles Abbott at the Downing Centre he said yesterday he
was "very relieved" with the magistrate's decision.Photo: Andrew Quilty

The former deputy chairman of HIH Insurance Ltd, Charles Abbott,
has been exonerated of charges of acting dishonestly as a director
of the failed insurer.

Charges against Mr Abbott that he acted dishonestly as a
director in pushing for a $181,455 payment the day before the
company collapsed were dismissed yesterday by magistrate Margaret
Quinn at a committal hearing in Downing Centre Local Court.

Mr Abbott's private company, Ashkirk Pty Ltd, provided
consultancy services to HIH and the deputy chairman pressed for
prompt payment of his invoices late on the afternoon of March 14,
2001, the day before the company was placed into provisional
liquidation owing $5.3 billion.

But Ms Quinn said that while it was clear Mr Abbott had asked
for three months worth of fee invoices and $16,726 worth of hotel,
travel and secretarial expenses to be paid promptly, and asked
about the progress of the cheque clearance twice, she found that a
reasonable jury properly instructed would not convict him.

It would be difficult for a jury to conclude he had acted
dishonestly in obtaining the payment or used his position to get
the payment.

Ms Quinn said the Director of Public Prosecutions did not
dispute that Mr Abbott was entitled to the fees, nor that he was
entitled to be paid promptly.

She said while it was evident HIH was on the brink of
insolvency, it was not insolvent on March 14 and Mr Abbott made the
point that solvency could not be determined until the half yearly
accounts were finalised.

Even though the company was under considerable financial
pressure, it paid not only Abbott but also accountancy firm KPMG
and law firm Blake Dawson Waldron and ensured they received
same-day cheque clearance.

"The fact that the money was being sought so late in the day,
that is after 4 pm, and the payments themselves were not unusual,"
Ms Quinn said.

Mr Abbott's senior counsel, Bret Walker, had argued it was
"proper and prudent" the invoices be paid.

Yesterday the Australian Securities and Investments Commission
said it understood the Commonwealth Director of Public Prosecutions
would now consider whether to file an ex-officio indictment against
Mr Abbott, seeking to reinstate the charge.

Outside the court Mr Abbott said he was "very relieved" with Ms
Quinn's decision.

"It has been a strain and I am very relieved and very thankful
to my family and business associates for their support." He said he
was going home to "get some rest".

He would not comment on whether the dismissed charge should have
been laid.